The Trump-backed deal to “save” TikTok fails to address core national security concerns, according to some experts – and even top lawmakers seem to be in the dark about whether it complies with Congress’s law that stated the app would be banned if it remained in Chinese hands.
After a years-long legal saga, the Chinese-owned company on Thursday announced the creation of a new TikTok US joint venture governed by a majority-American board of directors.
China-based ByteDance holds a 19.9% stake in the entity and will maintain ownership of TikTok’s algorithm, which will be licensed to the US entity and “retrained” on US user data.
The terms fall short of Congress’s intentions to safeguard the app and mean that TikTok “will remain under ByteDance’s effective control,” according to Michael Sobolik, a top expert on China and senior fellow at the Hudson Institute.
“This isn’t a divestment, it’s a smokescreen,” he told The Post. “The algorithm remains under Beijing’s watchful eye, and ByteDance has the strongest ownership position inside this new consortium. All the national security concerns remain, despite assurances to the contrary from the administration.”
Federal law passed in 2024 required ByteDance to completely divest control of TikTok or face a total ban of the app in the US.
The legislation notably prohibits “any cooperation with respect to the operation of a content recommendation algorithm” or data-sharing between ByteDance and US-based owners. At the same time, the law leaves it up to the president to decide what constitutes a “qualified divestiture.”
China hawks in Congress pushed for a ban due to concerns that Beijing would leverage TikTok to spy on and influence the app’s base of 200 million American users.
TikTok went dark for a few hours after failing to meet the law’s January 2025 to change ownership.
But Trump on his first day in office signed an executive order keeping the platform up and running while the White House sought to broker new ownership.
So far, it’s unclear if congressional leaders will challenge the new deal. Experts say Americans are still lacking critical details about the arrangement.
“Without further detail it’s impossible to know whether this adheres to the letter of the law,” said Carrie Filipetti, executive director at the Vandenberg Coalition, a policy think tank.
“This is, of course, first and foremost about the importance of protecting American security from CCP influence, but it’s also about maintaining Congress’ oversight,” she added, using the acronym for the Communist Party of China.
“If they’re not willing to defend their power when their individual constituents’ security may be at risk, I’m not sure when they would be willing to,” Filipetti added.
On Thursday, Rep. John Moolenaar (R-Mich.), a staunch TikTok critic who chairs the House select committee on China, told CBS News he plans to hold a public hearing about the deal “in the coming months.”
“Most of us are not knowledgeable about the internal workings of that deal … One is: Does it make sure that the CCP does not have influence over the algorithm? And the other is: Can we assure Americans that their data is secure? Those are the two questions that need to be answered as we go forward,” Moolenaar said.
Sen. Tom Cotton (R-Ark.), who previously signaled he would oppose any deal that didn’t include China’s complete divestment, has yet to comment on the finalized deal.
Reps for the select committee and Cotton did not immediately return requests for comment.
ByteDance’s 19.9% stake in the new entity is the largest individual ownership stake in the partnership — and falls just below Congress’s mandated 20% cap on Chinese ownership.
US tech giant Oracle, Emirati investment fund MGX and US-based Silver Lake will each take 15% stakes, while a consortium of other investors that include billionaire Michael Dell will hold the rest.
TikTok said Oracle would serve as a “trusted security partner” that would oversee the revamped algorithm on US-based servers. Congress previously rejected a similar plan involving Oracle, dubbed “Project Texas,” as inadequate to address security concerns.
“The majority American owned Joint Venture will operate under defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for US users,” TikTok said in a statement.
While the deal’s exact financial terms were not disclosed, Bloomberg reported in September that ByteDance would receive 50% or more of profits from the TikTok US entity – including a roughly 20% cut in revenue from a hefty licensing fee it will charge for use of TikTok’s algorithm.
That would mean if TikTok US generated $20 billion in revenue, ByteDance would earn up to $4 billion. It would rake in even more profits due to its 19.9% ownership stake in the combined entity.
Vice President JD Vance, who spearheaded negotiations on the deal, previously said TikTok US was worth $14 billion.
Vance and Trump remained in close contact throughout the talks and prioritized securing a framework that would properly address national security and data privacy concerns, a source familiar with the situation said.
“With this new entity under the control of US investors, Americans can continue to enjoy TikTok safely and securely with their data protected in the United States,” a Vance spokesperson said in a statement.
The Post has reached out to TikTok for further comment.
About 66% of Trump voters believe the public has the right to know the final terms of the TikTok deal, according to an October poll conducted by Vandenberg.
Over nine in 10 respondents said they maintained concerns that TikTok is a national security risk.
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